Bitcoin Foundation vows to clean up currency's bad rep

Tired of bad press, Bitcoin advocates have launched a new foundation aimed at both promoting the electronic currency and funding infrastructure to maintain its momentum.

The Bitcoin Foundation is the brainchild of Gavin Andresen, who says he modeled it after the Linux Foundation, the non-profit organization that "promotes, protects, and advances" the open source OS.

"As the Bitcoin economy has evolved, we have all noticed barriers to its widespread adoption – botnets that attempt to undermine the network, hackers that threaten wallets, and an undeserved reputation stirred by ignorance and inaccurate reporting," reads a statement on the Foundation's website. Just how it plans to mitigate those threats, however, is not entirely clear.

Bitcoin-mining botnets are big business for fraudsters. Most recently, Sophos estimated that the ZeroAccess botnet could potentially bring in more than $100,000 per day.

Stories of hacks and heists have dogged the digital currency since its inception, too. Just this month, an unknown thief managed to pilfer 24,000 Bitcoins from trading exchange Bitfloor – a sum equivalent to $297,000 in real-world cash at today's exchange rate.

And while El Reg can speak to neither ignorance nor inaccurate reporting, it's true that Bitcoin has garnered a rather tarnished reputation. In 2011, the US Senate called for an investigation into the online currency over alleged links to money laundering, tax evasion, and other criminal activity. Even the libertarian-leaning Electronic Freedom Foundation has distanced itself from it.

But although Bitcoin Foundation chair Peter Vessenes agrees that there are schemers and criminals who try to exploit the Bitcoin community and that there remain legal issues to be addressed in various jurisdictions, he feels the legal climate around the currency has been entirely misrepresented.

"We occasionally hear threatening statements from government representatives that don't seem to understand the law, much less how great Bitcoins are for the world," Vessenes writes in an open letter to the Bitcoin community.

To address this problem, the Bitcoin Foundation has planned a number of activities aimed at promoting Bitcoin and raising the perception of its legitimacy in the mainstream media. These include organizing a Bitcoin conference, creating an opt-in certification process for Bitcoin businesses, and publishing a set of best practices for companies who wish to trade in the currency.

In addition, one of the Foundation's immediate goals is to raise money to provide a salary and some budget for Andresen, who so far has been working as the lead developer of the core Bitcoin software without any compensation.

To that end, the Foundation is offering memberships at various levels. Premier Industry Memberships go for 10,000 Bitcoins per year ($124,000), and Bitcoin exchange Mt. Gox has already signed on. The Foundation has also signed up BitInstant and CoinLab for Industry memberships, which go for 2,500 Bitcoins per year ($31,000).

Individuals can join for 2.5 Bitcoins per year ($31) or 25 Bitcoins ($310) for a lifetime membership, and the Foundation also accepts donations – in Bitcoins, naturally.

"This sort of support before launch is super encouraging," Vessenes writes. "I look forward to seeing more participation as we launch and get the word out." ®